Colorado legislators say 2017 session is productive

A bill could fix I-25 traffic — if it doesn't get stuck in its own legislative jam.

The state's legislative session ends May 10, and presumably, lawmakers will have come to some conclusion on how to fund the state government and meet a list of high-priority needs by then. But, if you've kept up with the headlines coming out of the state Capitol, you could be forgiven for having your doubts.

With mounting pressure to address a $9 billion backlog of high-priority state road projects; a budget crisis fueled by the controversial hospital provider fee; the threat of Taxpayer's Bill of Rights budget caps; and a grab bag of other problems and needs, the Republican-controlled Senate and the Democrat-controlled House have faced not only their own ideological differences, but disagreements within the parties themselves.

So it seems surprising that a trio of experienced local state legislators interviewed for this story — Democrat Reps. Pete Lee and Tony Exum, and Republican Rep. Larry Liston — say they don't find the session all that contentious. Exum and Liston were quick to note that they've already seen some of their legislation pass. Lee, meanwhile, commented that he thought the session was actually unusually productive, and that the perception of negativity was rooted in the fact that the legislature is addressing major issues that it ignored in the past, or deadlocked on. Take, for instance, construction defects legislation, which is intended to encourage the building of more condos and townhomes by lowering the risk of devastating lawsuits against builders and developers, while still providing homeowners with options.

"That little dispute has preceded my life in the political world and it looks like we're going to get that one done," Lee says. Of course, the same day that Lee spoke to the Indy, a House committee hearing on a key piece of construction defects legislation hit a major snag that threatened to once again derail the process.

And that seems to be the narrative of the legislature this session when it comes to its most important goals: impressive bipartisan compromises, huge snags and — well, we'll see.

This year, lawmakers have crafted a $26.8 billion budget bill that recently passed the Senate after going through several interesting iterations. The state's revenue has grown under the booming economy, but TABOR limits the rate of that growth, compelling the government to issue refunds and ensuring a stern debate over allocations.

The Joint Budget Committee — which is split between three Democrats and three Republicans — requires four votes to add anything to the budget. The Denver Post reported that Republicans on the committee blocked everything from money for the state's health exchange to funding to implement the state's new aid-in-dying law, which was approved by a solid 65 percent of voters in November.

But, in a turnaround, most of those issues saw compromises before the Senate handed the bill off to the House on March 30.

Lawmakers nevertheless acknowledged that the budget would likely still undergo sweeping changes depending upon the outcomes of compromises on transportation funding and the hospital provider fee.

The current budget crunch could be avoided if Republicans agree to take the hospital provider fee out of the state budget and classify it as an enterprise, or government-run business. Dems and many Republicans have rallied for that move since 2015. The so-called fee is actually a mix of fees paid by hospitals and federal match dollars. The pool of money is then returned to hospitals with the intention of offsetting the costs of uncompensated care.

If the fee is left in the budget, lawmakers will have to slash funding for K-12 schools and transportation, and reduce the hospital provider fee by $264 million. Since hospitals would also lose federal matching funds, they'd take a $528 million hit, likely forcing some rural hospitals to close.

Some Republicans, along with Americans for Prosperity, have opposed removing the fee from the budget for various reasons, from a desire to limit government growth to the belief that the fee is actually a tax and therefore rightly included in the budget, to the contention that the true budgetary problem is the state's Medicaid expansion.

Liston, for instance, calls Medicaid "the Pac-Man of the budget" and says, "I do feel that the expansion of Medicaid and human services is just eating our lunch at the budget and everything else is being shortchanged." He does not support removing the fee from the general fund.

Lee, in contrast, notes that the federal government and fees have covered the vast majority of the costs of the state's Medicaid expansion, which has helped the poor. Both he and Exum support removing the fee.

Enter Senate Bill 267, sponsored by Senate President Pro Tem Jerry Sonnenberg, R-Sterling, and Senate Minority Leader Lucia Guzman, D-Denver. The latest in a long list of budget-fix bills, the ambitious proposal would remove the hospital provider fee from the state budget, putting it in an enterprise fund, but also trim most state executive department budgets by 2 percent. The bill would also require the government to use its buildings to finance $1.35 billion in lease purchase agreements over the next 20 years, with the money going toward transportation projects. Until 2020, the state's contributions to the Highway Users Tax Fund and capital construction fund would be redirected to schools, particularly rural ones. It remains to be seen whether the bill can attract wide bipartisan support, however, considering that it runs contrary to some of the goals of both Democrats and Republicans.

Lee seemed upbeat about the bill's possibilities, while Exum and Liston said they needed to learn more about the bill before commenting on it.

Transportation funding appears to be on a more sure path. House Bill 1242, negotiated by House Speaker Crisanta Duran and Senate President Kevin Grantham, has passed the House. It would send a referred measure to voters asking to increase the state sales tax from 2.9 percent to 3.52 percent for 20 years, generating over $700 million a year, which would be used to cover $3.5 billion in bonds for transportation projects, like the needed expansion of Interstate 25 between Monument and Castle Rock. Mass transit would also get a share of the funds, and local governments would get a share for their own transportation funds. Vehicle registration fees would be cut in a bid to garner support from fiscal conservatives.

Notably, Liston and Lee agree that an increase of the gas tax would have been a more fair way to fund the transportation problem, though both are quick to admit that a gas tax polled poorly. "I believe in 'user pays' to a certain degree," Liston says. "And why ask some 75-year-old or 85-year-old who drives very little to pay .62 percent sales tax?"

Liston opposed HB 1242, but not just for that reason. He also thinks it attempts to do too much, that it's too pricey, and that it creates bureaucracies needlessly. Given that Colorado Springs voters approved a .62 percent sales tax in 2015 for road projects (also the reason Mayor John Suthers has opposed HB 1242), Liston calls the bill "a heavy lift" for voters in the area. And should a resulting ballot question lose in El Paso County, he says, he doubts the plan would survive, meaning the entire process would be wasted.

Both Exum and Lee, on the other hand, supported the bill. Exum notes that voters, not legislators, would ultimately decide whether to approve a tax should HB 1242 pass. And, he says, you have to deal in reality. The reality is, Coloradans prefer sales taxes to other taxes, the state doesn't have an extra $9 billion, and roads, particularly I-25, need to be upgraded or fixed.